The enactment of the Data Protection law will encourage the growth of e-commerce in Kenya. However, there is more for the relevant government agencies, online companies and other players to do in making buying and selling over the internet a success.
A lot of personal information, including name, national ID number, and phone number is needed to transact in a situation that does not require the physical presence of the seller and buyer.
People are reluctant to give out information because their security can be compromised and their privacy breached. It is comforting, therefore, to have a law that holds those who collect personal information responsible for safeguarding it.
But laws alone cannot grow the e-commerce sector. Even without specific policy and regulations, e-commerce in Kenya has impacted.
We have seen Amazon, Jumia, Aladin and a number of fast food outlets change the way we shop. The e-commerce firms owe their growth mainly to the falling cost of internet connectivity in Kenya and the convenience of paying using mobile money.
Still, e-commerce industry in Kenya faces various challenges.
First, online outlets find it difficult to deliver products to homes or offices (store-to-door orders). This is because street address system is poor and non-existent in most areas. Our understanding of an address is informed by how letters used to reach us and not the physical location of where we live. A foreigner once remarked that “everybody here lives in a Post Office Box”.
Second, we have a human-centric attitude. We like personalising shopping.
We want to see, touch and where possible, bargain. And this is not to say a social connection with a shopkeeper is a bad thing. It builds trust and the buyer is able to get clarification on the item(s) he or she is about to buy.
Traditional outlets will continue to attract customers who want to browse in a mall for various products.
The older generation, less tech-savvy but probably with better purchasing power, will shop at those physical stores for a long time.
Third, the Data Protection law comes with complex and costly administrative procedures. An e-commerce firm will need to employ a a Data Protection Officer who will be responsible for ensuring that the company is in compliance with the Data Protection laws by conducting frequent security audits, training company staff and offering professional advice.
This is the person who, for example, will ensure the removal of data that has outlived the purpose it was collected for.
The data protection law is going to change information culture. It is likely people will be asked to sign consent notes if their photos are going to be published in reports. The disclaimer is going to be more detailed and there will be more opt-in/out options in any engagement.
After reorganising and training employees, companies and institutions should start benefiting from new opportunities offered by online trade.
One such institution is the Postal Corporation. The internet, which starved the Post Office of revenue by killing letter writing through enticing emails, is now coming back to save it through small parcel deliveries, especially from cross border trade.
Kenya’s postal corporation has facilities countrywide that are underused. All they need to do is sign contracts with e-commerce companies to provide last mile services for their products. And then convert the halls at the various post offices countrywide into parcel sorting facilities.
The government, after establishing the office of the Data Protection Commissioner, will need to confront the contentious issue of taxation of e-commerce, the implementation of the National Addressing System, public education and awareness on e-commerce and the financing of e-commerce start-ups.
The challenge of funding and access to credit is certainly the most critical and challenging to realise, especially for upcoming entrepreneurs.
Most financiers would rather lend money to a traditional store they can physically visit to assess, than risk their resources in brilliant ideas in the minds of a young innovator and his or her IT applications in the clouds.
Limo is a communication professional with an interest in computer-mediated communication and ICT.